The man, believed to be 45 and Romanian, was found lying on the ground at the site between Chichester and Bracklesham, West Sussex, at about 12.20am.
A Sussex Police spokesman said a 53-year-old man has been arrested on suspicion of murder and was being held in custody while inquiries continued.
Detective Chief Inspector Nick Sloan, from the force's major crime branch, said: "A thorough investigation is under way into the circumstances surrounding the death of this man. A post-mortem is still to take place and the man has yet to be formally identified, as we are very much in the early stages of the investigation."
Scenes of crime officers have been at the site while other officers are making local inquiries and the surrounding area is being searched.
It is believed the man had been staying there and died shortly before the alarm was raised, the spokesman added.